Is a Billion Dollar Development Project at the Heart of Bridgegate?

This morning I was a guest on MSNBC’s “Up With Steve Kornacki” where Steve Kornacki offered up some new reporting on the September 2013 George Washington Bridge closures. (See segment #1 and segment #2) After that segment Steve had me offer some context regarding the politics of real estate development in New Jersey in general and in this case in particular.

I helped Steve out with the reporting on this segment and hope you digest both clips. He and I are in the unique position of having worked for one of the central figures in this still-developing scandal, David Wildstein, one of Chris Christie’s appointees at the Port Authority of New York and New Jersey. Prior to that, David had been the pseudonymous editor of a political news website in N.J. called PoliticsNJ.com. I worked there in 2002, and Steve succeeded me from 2002-2005. Neither of us knew Wildstein’s true identity while we were reporting for the site. Speaking for myself, I found him to be an excellent editor. He always had sources to suggest on a story, let me report it wherever it led, and always had my back. He never let me down. Steve, I am sure, would say the same.

So far, we’ve learned a lot about the consequences of the traffic tie-ups orchestrated in Fort Lee by Wildstein and a now-fired deputy chief of staff in Christie’s office. Commutes were made hellishly long, school buses were snarled in traffic for hours, and EMS responders were held up for so long that some calls were answered on foot. All because two of the three toll lanes that usually serve one on-ramp in Fort Lee, on the New Jersey side of the George Washington Bridge, had been closed. Merging that traffic into just one toll lane caused cars to stack up on the ramp, then onto the approaching streets, then onto side streets, until eventually Fort Lee, the town that hosts the west side of the bridge, was completely clogged.

The unanswered question in this story has been “why?”

Why did deputy chief of staff Bridget Anne Kelly text David Wildstein on the morning of August 13 that it was “time for some traffic problems in Fort Lee”? Why did Wildstein already know enough about this plot to simply reply “Got it.”?

The explanation that’s been offered so far is that Governor Chris Christie, a Republican, was so obsessed with portraying himself as bipartisan in advance of a 2016 presidential run that he wanted to lock up as many local Democratic endorsements as possible during his gubernatorial campaign. The story is that the mayor of Fort Lee, Mark Sokolich, refused his request, and Christie’s people punished him, and his hometown, as an act of retribution.

For obvious reasons, this explanation is deeply unsatisfying. Mayor Sokolich can’t recall being asked for an endorsement – at least not with any pressure – and Governor Christie has claimed that he couldn’t pick Mayor Sokolich out of a lineup. Moreover, it seems unlikely that so many top aides and appointees would spend so much time and energy, and put themselves in so much legal jeopardy, to punish one mayor for not giving them an endorsement they hadn’t really pushed to get.

So if not that, what?

When I left PoliticsNJ.com for graduate school in history at the University of Virginia, I left with a keen understanding of the power and influence wielded by independent authorities and agencies in state and federal government. I ended up writing a PhD dissertation about banks and infrastructure projects in New York during the early republic, a project I’m in the final stages of turning into a book. Nowadays I teach at Baruch College at the City University of New York.

So, when I look at the George Washington Bridge, here’s what I see:

At the top of the photo you see the on-ramp to the GWB. And those two big empty parcels of land… what’s going on there?

Let me tell you.

If you’ve seen Fort Lee Mayor Mark Sokolich mention a “billion dollar redevelopment” going on in his town during his media appearances, you might think that he’s just bragging about some political accomplishment. Something he cares about, but that you don’t need to worry about. Yet those two pieces of land are where that billion dollar project, a commercial, residential and business complex called “Hudson Lights,” is being built.

Now consider the project’s proximity to the bridge. When we think about transportation infrastructure, we usually think only about the ‘thing’ being built: the bridge, tunnel, rail line, road, etc. But those projects have value because they connect things. They’re built because they allow people and goods to move, and they can dramatically increase the utility and value of the properties they connect. The Erie Canal did this in the early republic. Then the railroad. Then the subway, the highway, the airport.

The Hudson Lights project is a billion dollar project because it offers unparalleled access to the George Washington Bridge. But take away that access and it’s no longer a billion dollar project.

Mark Sokolich knew this back in September when the toll lanes from Fort Lee had been cut from three down to one. He asked Port Authority Deputy Executive Director Bill Baroni on September 12: “what do I do when our billion dollar development is put on line at the end of next year?”

He begged Baroni to respond. He gave him two office numbers and his home and cell number. Baroni gave him silence.

This is the first mention of Hudson Lights in the documents released so far under the NJ Assembly Committee subpoena directing Wildstein to produce all materials related to the GWB closures.

We know that because of its location, the long-term viability of this project could be threatened by any permanent changes to the GWB toll lanes that negatively impacted the on-ramp adjacent to the site.

But something else was going on here during these weeks in August and September that hadn’t been discussed until today’s show.

On August 15, two days after the go was given to cause traffic problems in Fort Lee, Mayor Sokolich and the Fort Lee town council held a meeting during which the redevelopment project’s contract was discussed. We don’t know what happened, as it was a closed session. But one week later, on August 22, the mayor was authorized by the council to finalize documents relating to how one phase of the redevelopment was to be financed.

In other words, even though the permits were in place, the zoning approvals were done, the designs were finished, there was one last thing to lock down: the money.

When we look back at ribbon cuttings and ceremonial openings of big things – I always think back to the Erie Canal – it can seem like those projects were inevitable. Of course, they aren’t. Nothing is in place until everything is in place. And what we now realize, from looking at documents hidden in plain sight, is that the financing for Mark Sokolich’s legacy project wasn’t in place yet. Moreover, the most crucial weeks that would decide whether this project would be capitalized are coincident with the weeks between when the traffic shut-down was ordered and when the traffic shut-down was lifted. It was only after Port Authority Executive Director Patrick Foye learned of Baroni and Wildstein’s shenanigans that the financing was finally sewn up. In fact, it was the very first business day after the lanes were re-opened that the developers announced they’d raised $218 million. A Bergen Record story about the funding said that the groundbreaking had been pushed back “because of a combination of factors…including nailing down financing as well as lining up a high-profile tenant.”

I find it hard to believe that would-be investors in this project weren’t alarmed by the prospect that Port Authority officials had decided, without warning, to begin running experiments to see what would happen if local access to the GWB was temporarily, and then permanently, restricted. And in light of Mayor Sokolich’s first question to Chris Christie during their face-to-face meeting in Fort Lee this past week, asking the governor to promise not to exact revenge on Fort Lee for the trouble this scandal is causing, it seems even more significant that the governor was musing about making permanent changes in public during his December 2 press conference in Trenton. The cat was completely out of the bag on whether there had been a legitimate “traffic study,” and yet the governor persisted in characterizing the allocation of toll lanes as something that gave an unfair benefit to Fort Lee at the expense of the rest of the human race. Even in December, it seemed, Fort Lee and this project still faced a threat.

When you realize that infrastructure and development projects are extensions of politics – things that partisans get involved with when they’re not running election campaigns – then you realize that places like the Port Authority and projects like Hudson Lights can be seen as legitimate venues for political appointees and operatives to extract favors and enforce discipline. We like to think that by creating an agency we formalize and professionalize the activities that agency handles, like, say, running the GWB and the Lincoln Tunnel. But these are inherently political animals, and they are always at risk of being misused for narrowly partisan purposes. After all, the tolls collected on the bridges and tunnels don’t go to pay for payroll and paving alone; they’re used to underwrite bonds for bigger capital projects. The Port Authority spent $25 billion on such projects since 2002; about a third of that has gone toward rebuilding the World Trade Center, leaving just under $16 billion for everything else. That’s a pile of money just too big to ignore, and the inherent power it vests in the top brass of the Port Authority means that they’re not just ordinary political appointees. They’re political entrepreneurs, always looking for new ways to get in on new deals and make things happen for their bosses.

I think that begins to get at what was going on here. We now know that a major redevelopment project, one that depends on Port Authority assets and relationships, was put in jeopardy at a vulnerable financial moment, and in a way that put the viability of the entire project at risk.

But we still don’t know why. This batch of subpoenaed documents isn’t going to tell us, and the people who know – who really know – either aren’t talking or haven’t yet been questioned.

Governor Christie told us in December that he had a talk with his top appointee at the Port Authority, Chairman David Samson, about the number of toll lanes allocated to the Fort Lee on-ramp. Clearly it’s time to find out why they were having that chat in the first place and if they were ever aware that there was a billion dollars at stake, just a few steps away from where the governor joked, “I moved the cones.”

Brian Murphy (@burrite) is a former political reporter in New Jersey and now an assistant professor of history at Baruch College, where he studies political economy and the politics of banking and infrastructure in the early American republic. He worked for David Wildstein in 2002 as the managing editor of PoliticsNJ.com and is also a friend of Bill Baroni. Both men are intimately involved in the scandal. He has not spoken with either about the scandal. He has never met Wildstein in person, and has not seen Baroni since 2009.